Casares noted that Hoffman and Volpi have a “proven history of recognizing emerging technologies before they reach the masses,” having both helped to usher in disruptive digital innovations (Facebook, Paypal, SoundCloud) in the past.

The CEO said Xapo will remain committed to bolstering the ecosystem, with the aim to bring bitcoin’s technology to a much wider audience.

“Looking ahead, we will continue to invest the funds in building our team and our suite of services. We are committed to developing the framework that allow bitcoins to be used by consumers in their everyday lives while also continuing to offer highly secure bitcoin storage for Wall Street funds, exchanges, and financial institutions handling bitcoins,” he said.

The VC perspective

Both of the VC firms who lead the round, Index Ventures and Greylock Partners, issued their own comments on the investment.

In a company blog post, Greylock Partners stated that bitcoin holds disruptive potential on three levels: as an asset, as a currency and as a platform for the creation of alternative financial applications. However, the firm believes bitcoin needs security to succeed:

“Unfortunately, it is both costly and risky for consumers to build their own technology infrastructure, process and physical infrastructure to secure their bitcoins. Xapo has created a system where average consumers can be comfortable and secure with holding and using bitcoins.”

Index Ventures also praised Xapo’s emphasis on security. However, the investor group stated that bitcoin still has a long way to go, describing it as a “baby in the financial markets”. It added:

“Bitcoin will never replace the US dollar or the euro, and that’s not its main goal. The more appropriate analogy for bitcoin is gold – a value system that doesn’t have a political affiliation, yet plays a part in overall monetary policy.”

The firm says it plans to focus its investment strategy on alternative payment systems like BitPay, currency exchange services such as Oanda and bitcoin storage services like Xapo.

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